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The Austrian banking crisis of 1931: one bad apple spoils the whole bunch

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  • Macher, Flora

Abstract

The current literature is inconclusive on the relative importance of foreign and domestic factors in bringing about the Austrian financial crisis in 1931. This paper offers new data to bring further clarity to this issue and emphasises the importance of a domestic factor: universal banks’ exposure to industrial enterprises. Industrial enterprises were the universal banks’ main borrowers and creditors. During the 1920s they did not perform well, and made the universal banks insolvent. The Credit-Anstalt, which became an ‘acquirer of last resort’ for weak universal banks during the 1920s, may have avoided its own demise had it been spared of one bank’s, the Unionbank’s assets.

Suggested Citation

  • Macher, Flora, 2018. "The Austrian banking crisis of 1931: one bad apple spoils the whole bunch," Economic History Working Papers 87151, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:87151
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    File URL: http://eprints.lse.ac.uk/87151/
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    References listed on IDEAS

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    Cited by:

    1. Jorge-Sotelo, Enrique, 2022. "Politicians, bankers and the Great Depression: The Spanish banking crisis of 1931," eabh Papers 22-01, The European Association for Banking and Financial History (EABH).

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    More about this item

    Keywords

    Great Depression; banking crisis; Credit-Anstalt; 1931; Central Europe; Austria;
    All these keywords.

    JEL classification:

    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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